Fraud and Bribery in Arkansas

McKnight’s reported that a judge has ordered the appointment of a special prosecutor to investigate an $80,000 wire transfer from a nursing home owner to a former state senator’s construction company — money that allegedly moved just days after the lawmaker introduced an amendment to limit negligence claims in Arkansas.

Sebastian County Prosecutor Dan Shue asked for an outside investigator to avoid any potential conflict of interest. The Times-Record also reported that Shue has asked the local U.S. Attorney to determine whether the wire transfer violated any federal law.

Jake Files (R), the one-time Fort Smith lawmaker at the center of the case, pleaded guilty in January to unrelated charges and is scheduled to be sentenced June 18. He faces counts of wire fraud, bank fraud and money laundering in relation to improper use of state improvement funds intended for a local sports complex.

The Times Record first discovered the 2014 nursing-home related transfer in civil court documents last year.

The money came from David Norsworthy, part owner in a dozen Arkansas nursing homes. It followed on the heels of a constitutional amendment that sought to limit damage lawsuits — like negligence claims commonly pursued against nursing homes — to $500,000.

That amendment failed then, but it found new life in the current session, before Files resigned in January.

Neither Files nor Norsworthy have explained the $80,000 transfer with media or in court.

The Arkansas Times reports the case has become an issue for those who support limiting lawsuits through Issue 1, a bill that has been publicly backed by nursing homes, doctors and chambers of commerce.